Exxon raked in another record profit this quarter surpassing its own past record. EXXON PIGS

To relate the enormity of their profits to the economical perspectives of us peons, their quarterly profits equate to earning $1,485.55 a second. Which means by the time I pull out of the gas station (if I purchased Exxon gas, that is) a whole pen full of Exxon Pigs would've waddled over to their money troughs and made more than what my car costs, my house, my property tax and our annual income.

One of the Head Pigs, Henry Hubble, Exxon's vice president of investor relations, spun this comment: "We continue to capture the benefit of strong industry conditions". That's a quintessential euphemism for:
"Nah-nah-nah-nah-nah-naah!! Bite me!"

Yep, made $1,485.55/second in net profit.

They paid $4,115.22/second in taxes.

Whose raping who?

Exxon-Mobil profit margin ~10%; Google profit margin ~24%. Where's the outrage? Mind you I'm not excited about paying $4.00/gallon for gas but I think the whole story isn't being told.

Dirt

Correct. There is more to the story, particularly the tax one. It's useless to go into it here, but in case anyone is inclined to take the tax per second stat as fact...don't.

But yet we drive our hogs to market and fill them up!

quote:

Correct. There is more to the story, particularly the tax one. It's useless to go into it here, but in case anyone is inclined to take the tax per second stat as fact...don't.

From their latest quarterly SEC filing (http://biz.yahoo.com/e/080805/xom10-q.html):

quote:

Income, sales-based and all other taxes and duties for the second quarter of 2008 of $32,361 million were higher than 2007. In the second quarter of 2008 income tax expense increased to $10,526 million and the effective income tax rate was 49 percent, compared to $7,668 million and 44 percent, respectively, in the prior year period. The change in the effective income tax rate reflects an increased share of total income from the non-U.S. Upstream segment. Sales-based taxes and all other taxes and duties increased in 2008 reflecting higher prices and foreign exchange.

If you do not trust that statement, you also can not trust the statement of $1,485.55/second in profit since that is derived from the same report; and the calculation of profit and taxes paid is using the same accounting standards.

Yes, there are more complexities -- the weak U.S. dollar affects both, driving up prices on oil that Exxon pumps itself; but at the same time meaning they're accounting for foreign taxes paid with dollars worth less so they have to pay more of them.

But you can't pick and choose your accounting methods when making a point. If you accept the profits per second as accurate, then so is the taxes per second.

No, the point is that a company that has reported the biggest quarterly profit for any company ever in the history of the world has made these profits:
a) while charging you and me the highest price for oil and gas in history and
b) while producing up to 10% less product than in the past.

I find it extremely amazing that some folk here refuse to see a connection between the record-high prices they pay at the pump and the record high profits Exxon Mobil reports. Is it that they don't see it or they just don't care? It amazes me why people willingly come to the defense of this mega-corp while it is clearly obvious they are raping us in plain sight.

It is not supply and demand. It is Exxon Mobil and their cronies producing less to charge more. These companies create shortages to suit their need for greed and then cry "supply and demand! supply and demand! as if any fool with a grade school education can't see the folly of the situation.

While they may be paying what some here consider unreasonable taxes, keep in mind these companies don't include in their profit reports the corporate welfare they receive from tax payers. In addition to paying 4 bucks or so per gallon for gas, you and I are giving these leeches, by some estimates, up to 35 billion dollars per year more in the form of tax breaks, subsidies, low interest loans and countless other corporate entitlements, both direct and indirect, that oil companies suck from the American taxpayer to enable them to line their pockets with prices that are beyond extortion. (Can't help but wonder why, just a few months ago, a certain party in the Senate was threatening a filibuster to defend $13 billion in direct subsidies to these pigs.)

I don't care how much Exxon pays in taxes. They are still able to rape us while gleefully reporting record profits. Did you wonder why the price of gas began to drop last week, just days before their reports of record profits wereublished? Maybe it's so every time you drive by an Exxon or Mobil station and you see a price a few cents lower than last week you will think "what a bunch of nice people these Exxon folk are, dropping prices like that!" rather than think how they are figuratively holding a gun to our heads and robbing cash from our wallets. Maybe those who don't take the financial news reports seriously or ignore them all together will be fooled by prices falling a few cents. Are American such dolts as to fall for that? Dropping the price a few cent's below 4 bucks for a few days is like a rapist who gives you a tender kiss when done using you. Crude, yes, but I think it describes what Exxon and others are doing to us. We've all gotten a tender kiss this week and apparently, it makes a very few of us all too willing to forgive them.

I don't care how much they cry that we need "more off-shore drilling! more off-shore drilling!" The blood-sucking jerks have been sitting on huge off-shore leases that they are not drilling in, not exploring, doing nothing but tying them up so supply can drop and prices can rise. Congress has finally gotten around to thinking about telling Exxon-Mobil and their co-conspirators to get off their ever-fattening asses and start drilling or lose their leases. Give them more leases? In your dreams.

Think more drilling is the answer? Want me to sign your petition demanding Congress open more areas for drilling? First ask the oil company bastards why they're jerking us around playing profit angles and not out exploring and drilling on the leases they already have with the tax money we gave them to do just that. It's not the Democrats in Congress that's preventing offshore drilling. It's the oil company executives who see more supply as detrimental to their profit margin that are blocking off-shore drilling and their cronies in the Government whose job it is to protect those profits. The best friends an administration sleeping with oil execs have are Democrats in Congress who rightfully see "More off-shore drilling" cries as empty and meaningless pandering to thoese easily fooled. No one, from the White House to the Exxon Mobil board room, wants to see more more off-shore drilling, more oil flowing and prices dropping. (As if drilling more would solve the problem. The administration's own reports conclude 10 years before a drop of oil might flow.)

Even if new off-shore oil could start pumping tomorrow, there is no guarantee that a drop of that oil would ever reach US shores. Consider the case of Alaska, where the whole North Slope/Alaskan pipeline project was approved by Congress with the very necessary provision that any oil produced was to remain in the US to reduce our dependence on foreign oil. Immediately after oil started flowing, the oil companies and their suck-ups in Congress, like Ted Stevens, began lobbying to make that oil available to sell to foreign countries. In the mid 90's, when Newt Gingrich and his ilk took out a contract on America, one of the bullets they put in our heads was too give Stevens and the other oil whores the go ahead to sell our oil overseas, the oil that was supposed to make us independent of foreign oil.

So if you trust the current administration or that "White-Haired Dude" to put a single drop of "our" oil into our homes or autos rather than sell it to the highest bidder, then just look to history.

More offshore drilling? My ass! Supply and demand? My ass! Sign your petition? My ass! We're giving these bastards our tax dollars to explore and increase production. We're giving them record profits by paying increasingly higher prices. In return they cut production by up to 10% and raise prices to record highs. I guess record profits and billions in corporate welfare isn't incentive enough.

I've said it before. Maybe it's time to conclude that the oil companies have stolen from us long enough. Maybe it's time to try them as criminals, put them away and sieze their assets. We do this with other scum like drug smugglers, organized crime figures like the Gotti's and others who suck at America's blood rather than do an honest day's work. Maybe it's time to take serious aim at oil execs. Then start look closer at the government whores that have been sleeping with them. (The FBI and the IRS are looking very closely at Ted Stevens and his Alaskan oil bedmates.)

The same White-Haired Dude that now receives hundreds of thousands of dollars in oil company contributions since he started crying "more off-shore drilling! more off-shore drilling!" now ridicules the suggestion that the simple and free act of making sure your tires are at the correct pressure can save a significant amount of fuel. He hands out tire pressure gauges labeled "Obama's Energy Plan," since in his apparently limited mind, that is a bad thing. (Someone should educate him about the benefits of conservation.) Automotive experts will testify that low tire pressure can increase fuel consumption by up to 2%. Having the correct pressure in your tires might save maybe a quarter gallon or more of gas every time you fill up. And that's free fuel. At no cost to you or in subsidies to tax-sucking corporations. And with no additional drilling. And right away, not in 10 years.

Consider that in the US, 390 million gallons of gasoline are consumed every day. (US Dept. of Energy figures.) Not every car will waste 2% because of low tire pressure but assume that a (probably very low) figure of 5% of vehicles might. That's 390,000 gallons/day of wasted gas, about 14.25 million gallons of wasted gas per year. (For those of you keeping score at home that's well over a half-billion dollars in sales of the wasted gasoline that the White-Haired Dude laughs at. Over a half billion dollars that the oil companies count on. No wonder he laughs at it. No profit to his bed-mates if you do take a pressure gauge and spend a minute or two to save yourself some money.

Reagan scoffed at solar energy. Cheney scoffed at conservation. The White-Haired Dude scoffs at saving millions of gallons of gas by reminding folks of the simple act of checking their tire pressure. His cronies have fought for years against raising the gas milage standards by even a very small amount. Now a even a simple cost-free suggestion to help reduce oil consuption is scoffed at in true party fashion. Personal responsibility has never been encouraged by this administration or their co-horts. Was Cheney right? Conservation is not part of the solution? The White-Haired Dude seems more than willing to carry on the tradition for 4 more gas-guzzling years. So who's raping who and who's helping them?

This now concludes my annual (or is it now semi-annual?) oil company, record profit rant.

Wayne

quote:

find it extremely amazing that some folk here refuse to see a connection between the record-high prices they pay at the pump and the record high profits Exxon Mobil reports.

I'd far prefer Exxon Mobil to make profits that are returned to the pockets of Americans, primarily through their pension and 401(k) investments, in order to control the supply and demand of gasoline then through well intentioned but horribly misguided government intervention.

I am old enough to remember the gas lines caused in the 1970s by attempts to control prices and ration the supply. We do NOT need a return to those days.

"Corporate welfare" counts in the profits. There is no other way to account for it.

Are there areas the government has failed to regulate properly? Certainly. We've long had a "pro-business" rather the "pro-market" approach to regulations. Too much industry consolidation has been allowed, reducing competetion and helping to contribute to the shortage in refining capacity. Part of the high prices today undoubtedly has to do with non-speculative investors creating a price bubble (they're different from the traditional and savvy speculative investors who provide the liquidity to keep the market financed and operating). We don't need broad new regulations, but we do need regulators willing to do their jobs.

Drill for oil, build the windmills, roll out the nuclear plants. Conservation is only one modest piece of the puzzle, along with other modest pieces that together end up being a real solution.

I think I'll boil down my rant to one specific question at a time.

To start:

Why are you and I giving any subsidies at all to an industry that continually reports record profits? Isn't the promise of many billions of dollars more in profit each year incentive enough?

I get paid a decent salary at my job. I don't think American taxpayers should have to give me additional income just to go do it.

Wayne

We shouldn't.

We have horrible policies -- across all levels of government in this nation -- that use tax incentives to try and influence decisions.

Exxon should no more be getting tax incentives then Toyota.

Yet Toyota does -- from state and local tax breaks to build new plants (that locally owned businessmen don't receive...forcing small businesses in many cases to pay higher taxes then multi-national corporations); and Toyota gets indirect tax incentives -- the 2004 to 2007 hybrid car tax credits for examples that gave purchasers are break on their income taxes. In 2006 Toyota had $17 Billion in profits; they're forecast with the downturn to make only $11.5 Billion in FY08/09.

Why single out Exxon (or any oil company) saying they shouldn't receive corporate welfare? What makes the profits earned on drilling for oil somehow more evil then the profits earned building a Prius which burns that oil?

Tax incentive financing is a bad idea, but it's a bad idea across the board. Large corporations shouldn't be able to play states against one another to see who will give them the biggest tax break (ones not available to smaller manufacturers and companies). Nor should they be getting incredibly specifically tailored federal income tax exemptions.

While I am not a full supporter of "FAIR Tax," it has good points and moving to some sort of VAT (Value Added Tax) like Europe uses heavily and away from a complex income tax code full of special interest exemptions would be a good idea.

Don't hold your breath waiting for a change to the tax code from any party!

Dirt

quote:

Originally posted by adirondackgardener:
I think I'll boil down my rant to one specific question at a time.

Wayne

Thanks. I was getting ready to do a cut and paste on you!

Can you further explain something for me? Is it the total profits or profit margin that irritates you so? Based on Exxon-Mobil sales what do yo think is a fair profit and profit margin? And if someone with less sales has a higher profit margin than the "Exxon Pigs" should they be hit with a windfall profits tax? Speaking of which, could you define "windfall profits" for me?

Thanks,
Dirt

PS. IRT your question I agree 100%!

quote:

Originally posted by Dirt Pit:

quote:

Originally posted by adirondackgardener:
I think I'll boil down my rant to one specific question at a time.

Wayne

Thanks. I was getting ready to do a cut and paste on you!

Can you further explain something for me? Is it the total profits or profit margin that irritates you so? Based on Exxon-Mobil sales what do yo think is a fair profit and profit margin? And if someone with less sales has a higher profit margin than the "Exxon Pigs" should they be hit with a windfall profits tax? Speaking of which, could you define "windfall profits" for me?

Thanks,
Dirt

PS. IRT your question I agree 100%!

Hard to define "Windfall Profits" but I'll try with an analogy with my own industry.

The company I am fortunate to work for builds modular homes in two factories here in Maine. (It's why I moved here.) Single family homes, multi-family and big condo projects. (Quality stuff too, in case anyone is in the market ) We get hit with periodic raw material price rises such as the lumber, (too much of which originates in Canada.) We also get hit with higher costs for just about everything from nails to sheetrock to plumbing fixtures, all due to the exorbitant price of the fuel required to produce and ship them. We get hit with the same high prices at the pump as everyone else when we send our trucks to fill up so we can deliver someone's new home to them. We get hit with excessive prices for fuel to heat the factories and offices so we can keep a 150 people working through the winter.

Can we just add those additional costs to the price of our homes so we can enjoy the same profit margin as we have in the past and happily continue to earn our same profit margin? Perhaps, but unlike the oil industry, ours is one with a lot of competition. We have to eat a lot of those costs to stay competitive with the other companies, all desperate for the business we are getting. Can we up the price even further to gouge our custmers, crying that the raw materials are forcing exorbitant price increases? No. But the oil companies do. And can we cut pur production by 10% to create a shortage in product? No but Exxon-Mobil can.

Our customers are quick to calculate that a 10% increase in our costs shouldn't translate to a 25% or more increase in their purchase price. If we had as little competition as exists in the oil industry, maybe we could gouge our customers, desperate as they are for housing, but then we would be as much a pig as Exxon Mobil (and by the way, I'm not just talking about Exxon Mobil, though they are the biggest and most profiting price-gouging scumbags in the industry. (Actually, the biggest and most profiting scumbags ever in the history of the world.)

So Dirt, to answer your question, if we we could get away with it and make $X Million in additional profits above those which could normally be expected by jacking our prices well above the extra costs we incurred through increases in actual material and energy costs, and by cutting production by 10% and by crying "supply and demand! supply and demand!" then we would have made $X million in windfall profits. And we should pay through the nose for the those profits (or be investigated for price gouging and perhaps serve jail time.)

As for total profits vs. profit margins, that is something that I give little thought to. I am more concerned with typical expected profits vs. actual profits during times of shortage or emergency. We are seemingly in a time of alleged shortage and/or emergency as regards the price of crude oil, the raw material for Exxon Mobil and other refinery operators. I'm not sure it takes an economic majors or even a 4th grade math wizard to conclude that record profits during a time of higher costs of raw material while cutting production by 10% is not a result of an industry simply passing along their added costs.

Fortunately for me, I work in a competitive industry and also am employed by honorable people and not Rex Tillerson, Exxon-Mobil's CEO. (Salary: $1.87 million for 2008, and almost $20 million in bonus and stock awards.)

If these were convenience store operators selling bottled water for 4 bucks a gallon after a Florida hurricane, Rex Tillerson would be spending time behind bars.

Wayne

(Thanks for not cutting and pasting my whole rant. This reply was probably too long also but it wasn't meant to be.)

Next point: This about one taxes. Specifically about Matts assertion that "Exxon Mobil "paid $4,115.22/second in taxes."

I believe Suasoria is correct to be skeptical about Matt's tax figure. My calculations, based on careful reading of Exxon's reports shows the tax that they paid to be less than 1/4 of Matts figure.

According the the Exxon Mobil Website, they paid about $29.9 billion in income taxes (the SEC filing, which I've read only second-hand claims $29.2 billion.) Using their higher figure, that comes out to only $948/sec. Matt includes sales-based taxes which, as I understand it, is the amount they collect as sales tax which must be forwarded on to the state and federal governments. These are not taxes being paid out of pocket by the company but money that we consumers have already paid out of our pockets and entrusted to the retailer to forward to the state or federal government. (You need to read these reports and filings carefully. If the taxes are listed under costs and deductions, they are not income taxes.)

If your state has a sales tax and you pay 4 cents on every dollar down at the corner store, that 4 cents is paid by the customer. not the retailer. The retailer must forward it on and it must be accounted for in their ledgers and in their filings if they are a publically traded company but it is incorrect to claim that that 4 cents is part of the taxes paid by the corporation.

Wayne

Good catch Wayne. You owe me a beer!

Dirt


PPS. The above should not be construed as a political statement or endorsement for any candidate or political party. (If you think it is think again!)